Question 1
1.
Offering insurance coverage through an optional rider would likely cause the most problems with adverse selection for which condition?
Answer
| Prenatal care for pregnant women | ||
| Stress reduction counseling for employees | ||
| HIV/AIDS treatment | ||
| Preventive dental examinations | ||
| Policy covering accidents for children in daycare |
1 points
Question 2
1.
Bill’s health insurance covers preventive and cosmetic dental services, including orthodontic care, for employees and their family members. Bill is willing to pay $30 per month for over-the-counter teeth-whitening strips at the local pharmacy. With his co-pay, he learns he can pay $25 per month and receive professional teeth-whitening services at his dentist. He chooses to go to the dentist for the service, which costs the insurance company $75 per month.
This is an example of adverse selection. True or false?
Answer
True
False
1 points
Question 3
1.
An actuarial assistant at an HMO presents graphs and charts of the number of colonoscopies performed per 1,000 patients by each doctor in its plan. This is an example of:
Answer
| Preadmission testing. | ||
| Concurrent review. | ||
| Retrospective review. | ||
| Discharge planning. | ||
| Database profiling. |
1 points
Question 4
1.
Catastrophic medical expenses are large, infrequent, and unpredictable. Risk aversion explains why people buy insurance which covers such catastrophic events.
Answer
True
False
1 points
Question 5
1.
Health economists observe individuals’ willingness to pay not only by observing cash transactions, but also by observing patients’ time spent waiting and/or pain endured to obtain medical services. Examples of observable, non-cash prices paid by patients include all of the following,except:
Answer
| A caretaker waits 9 months for a family member to receive nursing home care. | ||
| A patient undergoes experimental cancer vaccine to arrest the growth of a tumor. | ||
| A patient pays another patient $50 to trade places in the queue at the free clinic. | ||
| An elderly patient waits 8 hours to see a doctor for free at a famous eye clinic. | ||
| A morbidly obese patient must undergo 6 months of nutrition counseling prior to undergoing surgery to induce weight loss. |
1 points
Question 6
1.
The Law of Large Numbers explains why it is unlikely that the actuarially fair premium for an insurance policy will be the same for a small start-up firm as it will be for a large employer such as a university.
Answer
True
False
1 points
Question 7
1.
The demand for cosmetic surgery is more elastic than the demand for Botox treatments. True or false?
Answer
True
False
1 points
Question 8
1.
If a dentist decides to lower the price of teeth-whitening treatments, total sales (revenues) for treatments will go up if:
Answer
| Excess supply for teeth-whitening services exists. | ||
| Price elasticity is less than one. | ||
| Price elasticity is greater than one. | ||
| Excess demand for teeth-whitening services exists. | ||
| Price elasticity of demand has changed. |
1 points
Question 9
1.
Health Savings Accounts may contribute to risk-sharing problems as younger, healthier, better-educated individuals use HSAs as savings accounts. True or false?
Answer
True
False
1 points
Question 10
1.
Traditional fee-for-service (FFS) payment plans of Medicare and Medicaid in the 1970s contributed to cost escalation because:
Answer
| Physicians had incentive to provide more services. | ||
| Patients had incentive to demand more care. | ||
| Insurance companies had no incentive to contains costs. | ||
| Government had no system-wide tools to reduce costs. | ||
| All of the above. |
